BP stock sinks after latest worries over damaged well
BP's stock is sinking again, along with the company's prospects for keeping its leaking oil well sealed and unloading tainted assets. On the London Stock Exchange yesterday, BP's share prices fell 4.6 per cent to 388.3 pence after the company said costs for cleaning up its Gulf of Mexico oil spill had reached almost US$4 billion (Dh14.68bn), its engineers discovered gas or oil leaking from the ocean floor near the well head and reports emerged that BP's talks with Apache over asset sales had stalled.
On Sunday, the US government released a letter from its top oil spill official, the retired coastguard admiral Thad Allen, to the BP chief managing director Bob Dudley directing the company to submit a plan for speedily reopening the Macondo well if the "hydrocarbon seepage" was confirmed. The letter also asked BP to monitor the seepage closely to ensure the well bore had not ruptured. "Given the current observations from the test, including the detected seep a distance from the well and undetermined anomalies at the well head, monitoring of the seabed is of paramount importance during the test period," the letter said.
BP said the seep might be unrelated to its well. Experts confirmed that, saying natural seepages of gas from the ocean floor were common. Methane from bacterial degradation of organic matter is often trapped in sediments at the bottom of seas and lakes and may be released by any disturbance. But BP earlier reported an unexpectedly slow increase in pressure inside the well cap during tests, suggesting a possible leak from the well bore.
Confirmation of a leak would be bad news, as the problem would be harder to control with the relief well BP expects to complete in coming weeks. Earlier on Sunday, the BP chief operating officer Doug Suttles said he hoped to keep the well sealed with the cap until the relief well was finished, allowing the injection of mud and cement to create a permanent seal. The cap, in place since last Thursday, is the first measure that has even temporarily stopped the flow of oil from the broken well head.
Bloomberg reported yesterday, citing an unidentified source, that BP's talks to sell half its stake in Alaska's giant Prudhoe Bay oilfield to the US company Apache had stuttered over valuation and liability issues, raising doubt that the deal, estimated at between $10bn and $12bn, would be completed. BP is seeking to raise at least $10bn from asset sales to help cover its contributions to a $20bn fund it has promised to set up to pay for damage caused by the oil spill.
Published: July 19, 2010 04:00 AM